NEGOTIATING WITH THE LENDER

  Getting this information from the lender is just the beginning. It does not mean they are going to accept your offer.

  You need to convince them that to sell to you will be to their benefit. It does not matter to the person you are talking to on the phone, but he doesn’t want to look like an idiot when he presents your offer to his bosses.

  Usually what he is required to do is organize the offer into a set format for his bosses to send up-line for approval. The better it looks, the better your chances are that it will be accepted.

  You should focus on one thing – what's in it for them. When you submit the packet of information to them you should concentrate on making that letter of explanation, your intention, as clear and concise as possible.

  You want to point out all that is wrong with the house, and tell them how much time and money they will be saving by selling to you.

  Things to point out are, any damages to the house, any negative press for that area (was there a crime committed near by?), and how much repairs will cost.

  Don’t forget to mention, if the homeowner files for bankruptcy (and mention that they are considering it if they are), then the homeowners will have the house for another six months to a year. You can get it off their books now. And, you will be saving them the time necessary to clean up and renovate, holding costs, and a real estate agent commission.

  THE ALL IMPORTANT BPO

  Almost all lenders will require a broker’s price opinion (BPO). I’ve never known of one that didn’t. A broker’s price opinion is just a real state agent’s estimate of how much a house is worth. They can do a very thorough job, or drive by and never touch the dirt around the house.

  The banks are usually (but not always) the ones who request this of the broker. They can be paid really cheap ($50) to a couple hundred.

  I have had a bank do quirky things, like making me come up with the BPO. Which seems a little strange to me – kind of like having the fox count the chickens. But whatever they want, do it.

  When you make first contact ask them if they are going to order the BPO yet. Most will not, but if they can or will, then they need to get started.

  SHORT SALE RAMIFICATION TO THE SELLER

  Not all things are rosy for the seller. You need to be sure that no where in the packet is there an agreement that the seller pays back the shortage to the lender. If it’s in your packet, it might look like a promissory note.

  Occasionally, you will see that in their packet. But, the whole intent of the short sale is to allow the seller to move on with their life. If they are willing to assume part or all of the shortage, then great, they should sign these documents. But otherwise, be careful of surprises if the seller doesn’t intend on assuming the shortage.

  In most cases, they will be relieved of all debt associated with this short sale. But don’t promise the seller anything. Maybe in most cases the lender will not pursue them for the shortage through a deficiency judgment, but you can not, and should not, be guaranteeing such.

  PAYING THE SELLER MONEY

  Don’t promise the seller any money. In all the short sales that I have done, there is specific verbiage forbidding the buyer (you) from giving any monies to the homeowner.

  If you think about it, it makes obvious sense. If the lender is agreeing to lose money on the deal, they don’t want the seller to walk away with money and a forgiven debt.

  There is one way around it, but be careful. It has to do with giving the seller money at the end for something.

  HOW TO MAKE AN OFFER ON A HOUSE IN BANKRUPTCY

  I have heard at least one guru say you can not make a short sale offer to a bank when a person is in bankruptcy.

  But my experience has been the opposite. I have found one or two banks willing to work with me. It’s really not that big a deal. Contact the bank first and if they will not speak with you then they will give you to the attorney. The attorney will ask for the purchase and sales (or perhaps a letter of intent). She will submit a release document to the court to be signed by the trustee and once the bank has that they will talk with you.

  NEGOTIATING WITH HOMEOWNERS (SELLERS)

  Negotiating with the seller (homeowner) is not that difficult. After all, at this point they are going to lose the house to foreclosure any way.

  You need to focus on “what’s in it for them”. Your main point will be to relieve the seller of the underlying debt and back payments.

  You should weave into the conversation that working with you they can move on with their life. A future lender, assuming they want to buy again, will look more favorably at a bankruptcy than a foreclosure.

  Once you get your foot in the door with a seller, it isn’t very hard to negotiate a short sale. Don’t automatically give up on a homeowner if they don’t want to sell their property. Time and circumstance can change their mind. Keep their name and call them in a month.

  WHAT OTHER INVESTORS WON’T DO – BUT YOU CAN

  Want another step that investors are not doing? Okay, I’ll give you two, they are not going to the homeowner’s door and they are not talking to them.

  Why not have your lumpy mail dropped off at their door. If you’re nervous about running into them, how about early Sunday morning before your family gets up, toss something on their doorstep. Do not put it in their mailbox, that’s illegal.

  After that, at some point when you have gathered a little courage, you need to actually knock on the doors. How many investors are actually knocking on the doors? Very very few.

  ADVERTISING

  There are two very big advantages to advertising for pre-foreclosure houses. The first is that other investors don’t know about them yet (assuming foreclosing procedures have not been started), and when THEY contact you, you already know they are a motivated seller. It is much easier to deal with a person who has called you, than making a cold call to someone who isn’t expecting your call.

  Advertising for a pre-foreclosure can be done in many forms. The easiest is newspapers. Either the nickel ads or the daily newspaper.

  After you have determined that, yes, real estate really does work, you will want to get a contract rate for advertising in either the nickel or daily newspapers (or both). But until you get the first house under your belt, just pay the normal rate, which will be something like double what you can get it for if you have contracted advertising.

  Don’t use any kind of display ads, just stick with classified. Experiment with making your ad stand out. Try bolding, blank lines at top and bottom, or surrounding the ad with a box.

  It's just a small sample of the "Secrets" I reveal in my book
"Mysteries and Secrets to Short Sales"

  To continue reading click the "Order" button below!

            Sincerely,

                        Brandy Eismon